Addressing climate change and other complex issues

In case of climate emergency…  Are you running for the exit?

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Addressing complex challenges: an enquiry

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ADDRESSING COMPLEX CHALLENGES — such as climate change and organisational culture — is particularly knotty because of their fundamental difference to the kinds of ‘straight-line’ problems we are more used to solving.  By their nature, complex problems are ‘messy’ and respond unpredictably when we try to intervene.  Models developed in one setting are rarely transferable to another, even though the contexts may seem similar.

At Contented, we bring together a diverse range of communications skills, including facilitators and coaches, journalists and artists, psychologists and educationalists, working across business, policy and their communities in a number of countries.  We  want to bring the experience of this network to explore the role that communications can play in addressing complex challenges.  We’re taking an enquiring approach with the aim of helping uncover the hidden connections.  

We want to help local authorities and companies to share their knowledge and learning.  These pages represent some of our insights from this enquiry; by nature they are a work in progress.  We welcome any additional reflections and co-enquirers, so please do get in touch.

A hypothesis: exploring new paradigms

Our working hypothesis is that we need to approach complex problems and challenges from an entirely different paradigm to traditional engineering thought.  In other words, a new underlying system of ideas,  beliefs, rules and knowledge.  “Many challenges are too large and complex for individuals to solve,” says communications specialist Gerard Davies. “There’s a wealth of scientific evidence that they require focus on the wider system and the relationships between all the elements within it.”

The Cynefin framework offers a series of decision-making domains to help identify how people perceive situations, and to make sense of behaviour.  Welsh for habitat, Cynefin was designed by knowledge management researcher David Snowden in 1999 while at IBM.  The illustration here by Edwin Stoop shows some of the characteristics of simple, complicated, complex and chaotic challenges.

An approach: action learning

Working within strange paradigms means taking ourselves outside our comfort zones.  We need to stay acutely aware of, and challenge, our most basic assumptions about how things work.  “As a physicist by training,” says Davies, “I know for example that in nano-technology, the laws of nature play out in unusual ways; under pressure, something may even expand.  As a musician, I am familiar with the power of non-verbal ways of knowing; if we don’t pay attention with all our senses, we miss vital data.”

To test our hypothesis, we work together as a learning community.  We design small change experiments in our own environments, generating and sharing data, reflections and learning.  We repeat the cycle through a number of iterations.  This process is known as action learning.  We continually develop and refine questions, which we use to probe the system we are trying to change.  To focus on the wider system, we need to participate within the environment, society and economy that make up the three ‘pillars’ of sustainable development.

Some big questions

How can we help individuals to understand their roles as change agents?  This is not just about altering their own behaviours, but championing change within their organisations and communities to embed sustainable behaviours across a wider tapestry.

How should government and business teams react to the climate emergency?  While international and central government have a huge role to play, it’s the local teams who, in practice, are saddled with the burden of coordinating responses on the ground. Where do they start? How can they identify and prioritise the real challenges?

How can business, public and third sector work together for prosperity of both planet and people around the world?  For example, creating an environment to nurture disruptive networks of startups, invest with responsible finance and manage risk.  Climate risks and resilience need to be at the heart of financial decision making.  A key challenge for organisations in the developed world is to understand how they can identify and quantify the impact of their actions on the world.  Why are organisations taking so long to reduce their carbon footprint?

How can companies tell the story of who they are, what they are doing and why they are making a difference?  As well as marketing to increasingly conscious consumers, communications are critical in retaining and attracting staff — one of the highest business costs.  As prospective employees question the credentials of companies they are considering applying to, existing staff are wondering what they can do each day to make the world a better place.

How can we deepen our participation in the wider system in order to really know it?  What creative strategies can we design to facilitate emergence of new insights into our home.  If eco-nomy is the management of the home, eco-logy is the knowledge of the home.  How well must we know a place before we can manage it sustainably?

A trillion-dollar global business opportunity?

TO SURVIVE AND THRIVE in connected global markets, shrewd businesses now understand they must perform a role in creating a better world.  National and local government have an important part to play in fostering an environment to facilitate that.

It is not only the hard business case that is convincing the Chief Executives of small and large organisations to get behind the United Nations’ plan for a more sustainable world – plentiful growth opportunities are now well-documented.   It is also a sense of corporate citizenship – the leaders of these businesses understand personally the case for change.

Attracting finance to the tune of trillions of dollars a year, overwhelmingly the most accepted framework is the UN’s Sustainable Development Goals (SDGs).  Launched in 2015, this sets 16 interrelated targets — from health to climate adaptation — that are monitored and measured, with a further one focusing on partnerships to support the rest.  Around just $3 trillion has been found so far, the United Nations Association reported in June 2019, and achieving them could bring in investment of twice that each year until 2030.

Some sectors however have been notably slow to take up the opportunity.  “Transport is very siloed,” says Sir Nic Cary, Director of Waysphere Transport Intelligence. “The sector is limited by commercial constraints and by the ability of government to orchestrate its efforts. So it tends to focus on engineering solutions, eschewing innovations ‘not invented here’. Many people in companies just don’t see the speed with which change is happening.”

Cleantech author Felicia Jackson also points to the importance of human capital. “One of the greatest challenges is getting individuals to understand their roles as change agents”, said Jackson, who lectures on Global Energy and Climate Policy at London University’s Centre for International Studies and Diplomacy at the School of Oriental and African Studies.  “It’s not just about altering one’s own behaviour, but taking opportunities to champion change within an organisation in order to embed sustainable behaviours within a wider tapestry,” she added.

Listen to a short overview of the opportunities from sustainable development, by cleantech author Felicia Jackson, addressing a 2019 workshop on transport and energy at the Contented offices in Birmingham, UK.

How should local government teams react to the climate emergency?

IT’S THE LOCAL TEAMS who, in practice, are saddled with the burden of tackling the climate emergency now declared by more than 1,000 jurisdictions around the world. Where do they start? How can they identify and prioritise the real challenges?

Climate heating impacts on many areas of citizens’ lives — from health and education, to energy and travel.   Taking transport, for instance: while railways and roads, and even signs and lighting, may all need upgrading, it’s not just about infrastructure. What then are the actual issues at stake? Where should councils direct their scarce resources? How can they make informed decisions?

The universally-recognised Sustainable Development Goals (SDGs) offer a powerful tool for strategic planning. They allow local authorities to examine issues from the point of view of society and the citizens themselves.  The SDGs prompt us to think about the interconnected issues and how government might help manage risk and mitigate impact.

A Special Report published by the Intergovernmental Panel on Climate Change in October 2018, describes “enormous harm” that a 2°C average rise in global temperatures is likely to cause, compared with a 1.5°C rise. Yet, it asserts, with concerted ambitious action, it may still be possible to limit heating to the lower threshold.

In November 2018, the major UK cities of Bristol and Manchester declared a climate emergency, setting targets for carbon neutrality. Since then, 19 countries have echoed concern for climate heating with more than 1,000 places covering 224 million citizens.

When a community is hit by a flood, what if children can’t get to school because a bridge has collapsed? In 2005, in an inundated Carlisle, UK, more than 63,000 homes were left without power. Poor people are less likely to be covered by insurance. In a heatwave blamed for 35,000 deaths across Europe in 2003, more women than men over 45-years-old succumbed.

The SDGs prompt us to think about the interconnected issues and how government might help manage risk and mitigate impact.

 

Doing well by collaborating for the greater good

RESEARCH BY CONSULTANTS Frost & Sullivan and GlobeScan with business network CSR Europe has shone a light on trends in global transformation that are shaping the future of societies and their economies. In 2007, interviews with business leaders around the world identified more than two-thirds who thought investment in sustainability gave them a competitive advantage or an opportunity for growth.

Nine years later, this figure had risen to three-quarters, with strategic partnerships seen as the most focused strategy. Nearly half the CEOs surveyed believed growth into the next decade would depend on this collaboration. However, technology is speeding up the need for working together in order to navigate an increasingly complex future. The authors believe the convergence of these two factors will open up new ways to create value.

Collaboration between public organisations and the private sector — including on financing and risk management — is an important catalyst in supporting a focus on Sustainable Development Goals.  Innovation hubs have sprung up around the world from Beijing to Birmingham.  There are numerous strategic arrangements involving local authorities and their Tier 1 suppliers for managing the risk of working with startups that are implementing new ideas, such as apps that engage customers and deliver new insights on their needs and behaviour.  Small to medium-sized enterprises are helping address working conditions, climate action, responsible consumption and production, health and wellbeing, industry innovation, and equality.

To illustrate this, the report analyses how universal Quality Education (Goal 4) can help address hunger, poverty, gender inequality, and ability to find decent work. Goal 11, Sustainable Cities and Communities, creates a chance to build infrastructure for energy, transport, water, waste and healthcare. This is also a catalyst for tech innovation to make living spaces more collaborative, inclusive, navigable, informed, safe and enjoyable, the report says.

The communications imperative

WHEN HURRICANE KATRINA STRUCK the town of New Orleans in the US, in 2005, a major energy company found its operations base under water. As a large automated business, it had a back-up system.  This also flooded and the whole company was out of action for a week at a cost of $800m.

No such risk had been mentioned in the financial accounts. However, the company had declared this possibility during the previous five years to the Carbon Disclosure Project, a database capturing company and city climate risk for investors and customers.

A key challenge for organisations in the developed world is to understand: how they can identify and quantify the impact of their actions and how they can tackle the SDGs. An important step is to develop internal reporting procedures, understanding what is going on and what impact they are having on the world around them — learning what their reality is.

“Remarkably, many companies don’t even know that,” Jackson said. “They need help to understand the impacts of their own activities.”

Communications are also critical in retaining and attracting staff. How can companies tell the story of who they are, what they are doing and why they are making a difference? Prospective employees are questioning the integrity and sustainable credentials of companies they are considering applying to. Existing employees are wondering what they can do daily to make the world more sustainable?’

In some countries, such as the UK, there are signs of a philosophical shift. Those who think climate change is the most important issue, and those who don’t.  The former understand and see the economic arguments for leadership, especially in areas of technology. For example, in energy and transport, leaders tend to have better understanding of the potential for growth.

Sustainability and the changing financial markets

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The climate crisis is focusing attention on the need for a sustainable financial system.

AS INVESTMENT TARGETS LOCK-ON to sustainable finance, local authorities — for many years working on pollution, poverty, education and more — are having to gear up for a new paradigm in planning.

The declaration of a Climate Emergency across 19 countries has surfaced the challenges of managing a sustainable society and it’s economy.  In the UK alone, 228 of the 408 principal local authorities had declared by mid-July 2019.  Globally, more than 1,000 pronouncements had by then been made, representing 224 million citizens.

Nowhere is the speed of change more apparent that in the area of finance.   Sustainability is is no longer a niche element of financial markets:  in September 2019, Bank of England Governor Mark Carney told the UN General Assembly that sustainable finance should be “optimised” into everyday mainstream financial decision-making.  “A new, sustainable financial system is being built,” he told the Climate Action Summit. “It is funding the initiatives and innovations of the private sector, it has the potential to amplify the effectiveness of the climate policies of your governments and it could accelerate the transition to a low carbon economy.   But the task is large, the window of opportunity is short, and the risks are existential.”

Where this will have most impact initially is on company reporting.  The disclosure of risk and how it is managed is critical.  Carney said, “To bring climate risks and resilience into the heart of financial decision making, climate disclosure must become comprehensive; climate risk management must be transformed, and sustainable investing must go mainstream.”

This process of transformation has already begun.  Catalysed by the G20 and created by the private sector, the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) has a created a comprehensive, practical and flexible framework for corporate disclosure of climate-related risks and opportunities.  Established in December 2015 and championed by Carney with a powerful speech, Breaking the Tragedy of the Horizon , the final TCFD recommendations were presented at the July 2017 G20 Summit in Hamburg, Germany.

Supporters of the TCFD framework control balance sheets worth over $120 trillion and include the world’s principal banks, asset managers, pension funds, insurers, credit rating agencies, accounting firms and shareholder advisory services. Four fifths of the 1100 top G20 companies are now disclosing climate-related financial risks in line with some of the TCFD recommendations, and three quarters of users of the information report a marked improvement in the quality of climate disclosures.

What will make the difference is the shift from voluntary to mandatory disclosure and it is something for which companies and municipalities must prepare. The UK has already launched a joint task-force with UK regulators to consider the most appropriate path to compelling companies to report these risks.

Changes in climate policies, new technologies and growing physical risks will prompt reassessments of the values of virtually every financial asset and that will be an issue for all new infrastructure development.  Whether it is the municipality or council commissioning the work, or the suppliers who provide it, an understanding of physical climate risk and the way in which this knowledge must be implemented in all new developments, is going to become a key challenge. Not least of which is, that climate risks impact across different operational silos. This means that areas that traditionally operate independently will need to be managed and addressed in a holistic way.  As Carney said, “Firms that align their business models to the transition to a net zero world will be rewarded handsomely. Those that fail to adapt will cease to exist.”

Earlier this year the UK government launched its own Green Finance Strategy and, as part of that programme, it is working with local authorities, cities, investors and civil society to help build partnerships to start delivering the pipeline of projects currently being developed at a local level. This is intended to help connect investors and the wider finance sector to local initiatives, and increase the role that regions and local organisations can take on in order to boost the development of green infrastructure.

As the atmosphere heats up, both literally and figuratively, it can be hard for a council to explain why and how it is helping achieve the UN goals. It is even harder to explain why it may seem to take so long. Two centuries of economic growth and development along one trajectory cannot simply be diverted along another path without ensuring the resilience of the infrastructure that exists, the robustness of new approaches, and the well-being and livelihoods of citizens.